Kurt,
Once again, THANK YOU! An excellent explanation & contribution... I appreciate your generousity of time & experience!

Cheers,
Dave Donhoff
Leverage Planner

"So the new buyers get all the meat, potatoes and dessert, and the 'gubmint' (every taxpayer) tries to make something palatable out of the garbage?"

Since the FDIC funds come from all the FDIC banks it is not 'government' money being used to cover the shortfalls.
Depositors above the FDIC limit can get hit, and the banks owners (shareholders) are wiped out.

"These seizures are amusing to watch!
The Feds all pull into the parking lot in unmarked cars over a staggered short-term time period. The agents just sit in their cars until everybody's arrived. Then, they 'storm' the building armed with dozens of rolls of yellow tape! Stand back...arms up!"

That brings back memories Tricae! Way back, once upon a time in the late 1980's, when it was the S&Ls going under, I did this 'storm trooper' work for a while. And your description is very accurate -- EXCEPT that we weren't actually government employees! I worked for an accounting firm that the FDIC contracted with to do these closings, and the team would get notice of only the city until the afternoon of.

We used to joke that this was the way to rob a bank -- Show up in navy or gray suits with laptop computers and a few computer printouts, make the standard announcement, then instruct the tellers to hand over their keys and watch while we "inventoried and took posession of" the money.

I was probably on about 20 "take down teams" over the years, and ya wanna guess how many times we were asked for ID? (Zero) How many times the Branch Manager called corporate for confirmation? (More than zero, but less than five. Mostly, they were just kept busy getting instructions from our takeover team leader.)

Scary, huh?

We have a CD thru IndyMac that doesn't mature until April. Anyone know if everything stays the same with that now that now that IndyMac is no more?

Your CD is fine as long as it's under $100K. Any overage will be subject to the 50% Redemption Certificate & sale of IndyMac's assets.

/tricia

Sweeby,

I didn't know you guys weren't Feds!

Did they make you practice/rehearse those poker faces?! lol

/t

The FDIC is actually a government owned corporation, though an older one (~1930s).
This is how Freddie and Fannie started out also.

Ok, I have a question for the bankers. I understand the $100k limit but how does this relate to businesses? Even my small business keeps many times the FDIC limit in our operating account. Our bi-weekly Payroll alone way exceeds this limit, so there is no way for us to spread the money around. Is there additional insurance that we can buy either from the bank or our insurance broker? I am really concerned about this since our bank is WaMU and while I know they are financially sound, all it takes is a loss of confidence and that can all change.

One other question, if you know the answer. I keep most of my money in investment accounts at SSB and MSDW. I know they are insured by SIPC, but in reading the SIPC coverage I noticed that only up to $100k of cash is covered. That is kind of scary since that is a very small given the nature of an investment account. I sent an e-mail to both of my brokers this AM but have heard nothing back. Do you know if money held in MM accounts are considered cash or an investment, which would then be covered under the regular SIPC insurance that goes to $2.5m.

Thanks in advance for your feed back.

kitchenshock,

There's a lot of really useful information available at the FDIC's website.

Here's the FDIC link to Business Accounts...

/tricia

Here is a link that might be useful: FDIC

Thanks triciae! That is really frighting. I guess the best bet is to deal with only the largest banks and hope the Feds would not let them fail becuase of their impact on the US economy. What this does tell me though is that if you are a business its best to probably avoid the local and regional banks which is unfortunate. I wonder how many businesses got clobbered by IndyMac.

Kitchenshock,

"...best to probably avoid the local and regional banks..."

That's not necessarily accurate.

Many of the regional & local banks have very conservative management...the perfect characture of the stodgy banker who will only lend you money after you prove you don't need the funds. Then, they will lend you money for a rainy day but when it actually rains...they want it back! :)

As we've just seen with IndyMac, large institutions can & do fail. I believe the FDIC said that IndyMac was either the 2nd or 3rd largest institution to fail in the FDIC's history.

Personally, I like dealing with the smaller banks where I know management & have developed a long-standing relationship. Of course, I also keep an eye on their financials.

I don't think anybody should just blindly deposit money with any institution, bank or brokerage, without first learning something about that institution. I monitor my bank's financials the same way I monitor my own...after all they are in possession of my money!

BTW, your brokerage MM is, probably, a sweep account into a MM fund. If so, that would be considered an 'investment' & not cash. If not specifically SIPC insured, it must say so.

There were undoubtedly thousands of businesses that have lost money on the IndyMac failure with the bulk, probably, being under 250 employees. Sad.

/tricia

Just out of curiousity, what happens to people who have mortgages with Indymac? Who do they pay now?

Hi lkplatow,

Mortgage payments are made to a "servicing" operation. IndyMac's servicing (at least for any servicing they didn't already outsource) will be maintained by the Feds until they have a buyer of those assets (the remaining inhouse servicing portion of the business.)

Cheers,
Dave Donhoff
Leverage Planner

lkplatow,

People with loans at IndyMac should continue making their payments as normal until/unless instructed otherwise by the FDIC. Eventually, people will receive notice that IndyMac's servicing portfolio & in-house portfolio have been assumed by somebody else & new payment instructions will be provided.

/tricia

Does anybody except me find it ironic that the founder of Countrywide Financial also founded IndyMac Bank...Angelo Mozilo?

I wonder where he's at now? Probably, working on his tan in the south of France.

/tricia

Tricia,

Alas... you bring forth something that makes me CRINGE in regret..... because this is something I knew about, AND COULD HAVE ACTED ON WITH A TRADE!!!!

IndyMac Bank was spun off FROM Countrywide in the 1990's (a little Google could find specifics.) He has two sons, Mark and Eric (yes, "Mozilo") who had both gone over to the IndyMac side in the spinoff. It was never covert, never secret... it just happened before anybody was really paying any attention to these two companies who would become behemoths.

IndyMac had significant backbone reps & warranties supported by Countrywide (and/or assigns (to differently named, but identical entities.)) Again, while not something openly spelled out & declared in general disclosures... also not rocket science to assume as commonly expectable.

When Countrywide's sale to BAC was finalized, IndyMac's backbone reps & warranties had their DNA removed... and it was then only a matter of days until the castle collapsed!

WHAT I CRINGE ABOUT;
This was ALL public knowledge (or at least guessable...) not "insider" knowledge...

We all had MONTHS to prepare for this from the time of the initial announcement the C'wide was being consumed!!!

I could have backed up the truck & loaded up on short positions on IndyMac Bank... and stood in front of any SEC investigator with completely clean hands afterwards!

OY.... "the one that got away!"
(I wish I could say that is the ONLY such "missed regret" I have...)

Cheers,
Dave Donhoff
Leverage Planner

OMG!, Dave.

I've known for years about Mozilo but never connected the dots of the food chain. Just never thought about it. Didn't BAC back Mozilo when he first founded Countrywide? I think BAC was in deep with Mozilo from Day One.

I sure understand how you feel. I so wanted Thornburg to survive. But, in my heart I knew they couldn't make it work with the malaise of the credit markets in August '07. So, I shorted a few shares. I didn't short nearly enough! I used my small 'day trading' account & instead of paying for my g-kids college educations...I made a pitance. Then, they dallied around the 3.00 mark forever & I had a second chance...that time I was afraid of BK & never made the short. Ahem.

I'm just hearing on CNBC that the SEC is investigating IndyMac for fraud.

/tricia

tricia, when you said "that time I was afraid of BK & never made the short. Ahem. " you couldn't have meant you were afraid of bankruptcy? because if a company you short goes bankrupt,i believe,you never have to cover..Kinda like a perfect opportunity

Yes, qdognj, I was afraid of BK. I used my short-term day trading account rarely in a position more than 48 hours & thought that if I didn't cover before they filed I'd be tied up for months. Is that incorrect? I've never shorted a stock hanging on by their toenails...and don't know the exact procedure. What happens after the stock is delisted & how long does the process take? Maybe, I'll make another attempt at making my fortune!? :) Please help me learn more about shorting a tanking company...there's lots to choose from these days!

Thanks,
Tricia

tricia,
You can buy to cover at any time during the process. The stock will probably get kicked off the major exchanges and end up on the pink sheets, but you can still buy it there - just be sure to use a limit order. Or you can wait until the process is over and if the stock is canceled and worthless, you will not have to buy it back at all and will get to keep all the cash you received when you sold it short.
FWIW, i short the indices using ETF's..Though i just turned bullish monday on the financials ETF(XLF)...I see a quick upturn of 5% +- in the near term, so i may cover my short of the Nasdaq 100(QID)

Well, drats!

Thanks, qdog..

Good thing I'm not a stock broker, huh? Don't answer that! :)

/t

Speaking of banks, customers of UBS and the LGT Bank in Liechtenstein will have some unwanted publicity to look forward to.

ABC News
Hundreds of Super Rich Under Investigation
Senate Committee Wants To Question Secret Account Holders & Bank Officials
By BRIAN ROSS, RHONDA SCHWARTZ, and AVNI PATEL

July 16, 2008

Hundreds of rich Americans whose names and secret foreign bank account information were turned over to US tax authorities could face criminal prosecution. A Senate committee is scheduled to convene tomorrow and among those called to testify are foreign bank account holders, including one of the wealthiest men in Los Angeles.

48 year-old Peter Lowy and his family own the giant Westfield shopping center fortune and will control the retail space in the rebuilt World Trade Center in New York. Bob Bennett, a lawyer for Lowy, who is a prominent contributor to both Democratic and Republican candidates, told ABC News that Lowy's name was on the list of secret accounts from a Liechtenstein bank but that Lowy did nothing wrong.

Bennett said Lowy is out of the country tomorrow and will not be available to testify.

For years, the LGT Bank in the tiny European principality of Liechtenstein, tucked between Austria and Switzerland, has been regarded as a safe haven for wealthy Americans trying to hide their money from the IRS. It helps that the reigning prince there, Hans-Adams II, and his family own the bank and strictly enforce the country's bank secrecy laws.

"Liechtenstein is regarded as one of the most secretive places in the world," said John Christensen of the London-based Tax Justice Network.

But all that changed when a disgruntled computer technician at LGT, Heinrich Kieber, downloaded all the names and secret accounts on to two CDs and turned them over to tax authorities in the US and Europe.

"It completely exposed the fact that Liechtenstein is nothing but a place to hide your money from tax collectors, and any other police who might be interested," said Kieber's Washington-based attorney Jack Blum. Kieber is now wanted in Liechtenstein for violating bank secrecy laws there, but his attorney says it is the tax cheats that are the real criminals.

"They are the people who are taking advantage of the rest of us, who are withholding and paying," said Blum. "They're the crooks."

Links that might be useful:

www.abcnews.go.com/Blotter/story?id=5294417&page=1
www.abcnews.go.com/Blotter/Story?id=5389687&page=2

Heh.... its crazy what the IRS and Congress unilaterally declare belongs to them!

If you're born to U.S. parents, but never set foot in the U.S., nor ever used any of its resources, you are still considered a U.S. citizen.

Your earnings are at the disposal of the IRS, regardless where you live, what you do, and what business you are in.

If you own a company that was created in another country, never touched by any other American, never does business with any American individual or company, and you already pay all taxes to the country that you and that company belong to... you are STILL 100% beholden to the IRS (according to the IRS.)

Of course, there are many shades of gray backwards from this extreme example... but defending assets and income from a big-yard bully like the American IRS is certainly nothing to automatically put someone in the wrong.

We culturally do things in the U.S. that are deemed illegal in parts of the Middle East.... but we wouldn't allow a 3rd generation Californian to be pursued or extradited to a fascist country for breaking a Quranic law simply because their parents were born to immigrants from that country.

Its simply ludicrous... and the IRS is rattling chains right now to scare the unwitting and unawares into compliance.

Cheers,
Dave

The IRS isn't the only one "rattling chains" right now to scare the unwitting and unawares into compliance.

Court Backs Bush on Military Detentions

By Adam Liptak

07/15/08 "New York Times" - -- President Bush has the legal power to order the indefinite military detentions of civilians captured in the United States, the federal appeals court in Richmond, Va., ruled on Tuesday in a fractured 5-to-4 decision.

"This decision means the president can pick up any person in the country citizen or legal resident and lock them up for years without the most basic safeguard in the Constitution, the right to a criminal trial"

www.informationclearinghouse.info/article20288.htm

Dream,
Indeed... we're sliding down a slippery slope, its just getting steeper, and we're accelerating rapidly.

All this when the theoretically "small government" party, and "individual freedom" party has held power for double terms...

I fear we're escalating the decay of an empire.... not unexpected to any historian, but disappointing nonetheless.

OH WELL..... I'm off to dinner with my Chinese connections just now. Call me fickle, but I see where the puck is sliding, and that's where I'm skating!

Cheers,
Dave

"This decision means the president can pick up any person in the country citizen or legal resident and lock them up for years without the most basic safeguard in the Constitution, the right to a criminal trial"

I don't know what you're trying to prove with your little editing trick there dreamgarden, but that was real slick leaving out the three little words from the news article that identified the speaker of the above quote. That quote was from the alleged terrorist's lawyer, not the federal appeals court.

That decision only affects that one terrorist since he is the only civilian enemy combatant in custody. In fact, it may not even affect him unless the Supreme Court agrees with the circuit's split decision.

But more importantly, that decision in no way would have any effect whatsoever on an AMERICAN citizen, whose habeas corpus rights are guaranteed by the U.S. Constitution.

"But more importantly, that decision in no way would have any effect whatsoever on an AMERICAN citizen, whose habeas corpus rights are guaranteed by the U.S. Constitution."

You are confused, BMM.

This case is about whether the habeas corpus rights guaranteed by the Constitution can be suspended in the case of "enemy combatants" held for alleged terrorist activities in the US.

The defendant in this case was a foreign national legally residing in the US. But whether the decision is limited to legal aliens is still open. In its arguments, the Bush Administration took the position that it has the right to hold American citizens, as well as legal aliens, indefinitely without trial if they are deemed to be "enemy combatants."

The Fourth Circuit did not explicitly limit its holding to resident aliens. Nor did it explicitly extend the suspension of habeas corpus under these circumstances to cover American citizens.

But we do know that Jose Padilla, an American citizen deemed an enemy combatant by the government, was held for three and a half years in a military brig. His petition for habeas corpus eventually was denied by a three-judge panel of the Fourth Circuit (the same appeals court that issued the recent decisions) and was due to be heard by the Supreme Court. Prior to the scheduled hearing, the Bush Administration voluntarily transferred his case to a civilian court where it was eventually tried.

So at this point, the decision of the Fourth Circuit (the highest authority to have spoken on this issue) in the Padilla case that American citizens deemed enemy combatants have no habeas corpus rights is still in effect and will remain so unless unless and until the Supreme Court decides otherwise.

I read it the same way as 'feedingfrenzy'. Czar George can suspend habeas corpus; declare me a terrorist; and put me away forever -- probably not in that order.

The Founding Fathers must be whirling -- while the beneficiaries of their document are too busy at the mall to complain, or to vote.

Such is the nature of a society that accepts the argument that our Constitution is "a living document in progress" and can be twisted, contorted, manipulated & adjusted at-will.

Unfortunately, like frogs in the proverbial pot on the stove, most Americans will simply tolerate the worsening temperatures, wait until its too late, and incur the inevitable... because standing individually and together against the encroaching tyranny "just seems so complicated and inconvenient."

D

Sadly, I agree with you Dave.

Reminds me of the old Peter, Paul, & Mary song from the 60s 'Have You Been To Jail For Justice?'...

HAVE YOU BEEN TO JAIL FOR JUSTICE?

Was it Cesar Chavez or Rosa Parks that day?
Some say Dr. King or Ghandi
Set them on their way.
No matter who your mentors are
It's pretty plain to see
That if you've been to jail for justice
You're in good company.

Have you been to jail for justice?
I want to shake your hand
'Cause sitting in and laying down
Are ways to take a stand.
Have you sung a song for freedom
Or marched that picket line?
Have you been to jail for justice?
Then you're a friend of mine.

You law abiding citizens
Come listen to this song
Laws are made by people
And people can be wrong.
Once unions were against the law
But slavery was fine
Women were denied the vote
While children worked the mine.
The more you study history
The less you can deny it
A rotten law stays on the books
'til folks with guts defy it!

Have you been to jail for justice?
I want to shake your hand
'Cause sitting in and laying down
Are ways to take a stand.
Have you sung a song for freedom
Or marched that picket line?
Have you been to jail for justice?
Then you're a friend of mine.

Well the law is supposed to serve us
And so are the police
When the system fails
It's up to us to speak our piece.
We must be ever vigilant
For justice to prevail
So get courage from your convictions
Let 'em haul you off to jail!

Have you been to jail for justice?
I want to shake your hand
'Cause sitting in and laying down
Are ways to take a stand.
Have you sung a song for freedom
Or marched that picket line?
Have you been to jail for justice?
Then you're a friend of mine.
Have you been to jail for justice?
Have you been to jail for justice?
Have you been to jail for justice?
Then you're a friend of mine.

/tricia :)

"Such is the nature of a society that accepts the argument that our Constitution is "a living document in progress" and can be twisted, contorted, manipulated & adjusted at-will."

You are also confused, Dave. It is the strict constructionist justices (Roberts, Scalia, Thomas and Alito) who have consistently supported the Bush Administration's position in the habeas corpus cases that have come before the Supreme Court.

Don't be fooled by labels. Both "strict constructionist" and "living constitution" judges are equally willing to twist contort, manipulate and adjust the Constitution to suit their particular viewpoints on the way the government should be run.

FF,

I brought no labels to be fooled by. I simply described the brutal dismal reality of those the idea that the Constitution can serve us well as a "flexible" document.

Doesn't matter the name of the judge, or the name of any political party, or what they SAY they mean or do....

What they ACTUALLY do is what matters.

We're watching the effects now of treating our Constituion as a "living document."

Dave

Doesn't matter the name of the judge, or the name of any political party, or what they SAY they mean or do....

What they ACTUALLY do is what matters.

http://www.youtube.com/watch?v=maMazTjjSiU

Sue,
Nice zinger!
D

"Clause 2. The Privilege of the Writ of Habeas Corpus shall not be suspended, unless when in Cases of Rebellion or Invasion the public Safety may require it."

Is an enemy combatant found in the United States the "Invasion" and "public safety" the Constitution speaks of?

At what point do we allow our enemies (if they actually are) the full protections of our Constitution?

We executed German landing party members during WWII after trying them before a military tribunal.
Should they have been allowed full access to our Judicial system?

There are JAG officers all over Iraq second guessing after the fact.
Are we going to send our soldiers into harms way and then second guess every action they make?

bethesdamadman-"I don't know what you're trying to prove with your little editing trick there dreamgarden, but that was real slick leaving out the three little words from the news article that identified the speaker of the above quote. That quote was from the alleged terrorist's lawyer, not the federal appeals court."

There are no "little editing tricks". I included the link so others could read the ENTIRE story and form their own opinions. Are you unable (or unwilling) to see the forest for the trees?

More tough news for IndyMac customers.

Banks reportedly not taking IndyMac checks
Finally able to withdraw their money, customers canât open new accounts

July. 17, 2008

LOS ANGELES - The frustration didn't end for some IndyMac customers when they finally were able to withdraw their funds from the failing Southern California bank seized last week by federal regulators.

Some people have run into more problems when they tried to deposit IndyMac cashier checks at other banks.

Sheryl MacPhee said she waited in line two hours Tuesday at an IndyMac branch in San Marino to liquidate a certificate of deposit. But when she took it to a Washington Mutual branch in South Pasadena to deposit, she said a manager told her their new policy was not to accept IndyMac checks. If the customer insisted, she said she was told, it could take eight weeks or more to access the full amount.

A link that might be useful:
www.msnbc.msn.com/id/25719584/

"Doesn't matter the name of the judge, or the name of any political party, or what they SAY they mean or do....

What they ACTUALLY do is what matters."

That, of course, is exactly my point and why we should pay attention to what judges actually decide, and not whether they label themselves "originalists" or proponents of the "living Constitution." Both types have shown themselves perfectly willing to expand government power at the expense of individual rights depending of the issue involved.

The originalists and strict constructionists tend to make decisions that undermine civil liberties (such as habeas corpus rights) while the living Constitution types often make decisions that undermine individual property rights (such as in the field of eminent domain) and also Second Amendment rights.

This split reflects the justices' underlying political orientations. The Constitution, itself, is very short (it can easily be read in well under an hour), far shorter than say the instruction manual that came with your new flat-screen TV. Many of its most important provisions can be interpreted in myriad plausible ways. Depending on how the individual justices want a case to come out, they can almost always find creative and ingenious ways to make the document say what they want it to say.

And this is equally as true for those who say they abhor the concept of the "living constitution" as for those who claim to embrace it.

fedingfrenzy: "So at this point, the decision of the Fourth Circuit (the highest authority to have spoken on this issue) in the Padilla case that American citizens deemed enemy combatants have no habeas corpus rights is still in effect and will remain so unless unless and until the Supreme Court decides otherwise. "

Sorry, but you're wrong in several very important ways. First of all, circuit courts do not make rulings that affect any matter ouside of their jurisdiction. Secondly, the ruling was by a three-judge panel and not the entire circuit bench. And finally, and perhaps most importantly, the second circuit ruled on this case as well and specifically held that the President did not have unilteral authority to suspend habeus corpus for American citizens. Therefore, your entire premise that the Fourth Cicuit was the highest court to rule on this matter, was on its face false.

At best, there are conflicting decisions. However, there isn't a person in the judiciary that doesn't realize that the administration's position would have been overruled by the Supreme Court.

The Southern District of New York ruled against the President; the Second Circuit Court of Appeals ruled against the President; and, the District of South Carolina ruled against the President. Only two extremely conservative judges on the most conservative circuit court in the nation ruled for the President. And if the administration thought they had any chance at all in prevailing at the Supreme Court, they wouldn't have folded their hand, thereby admitting defeat.

Why do people allow trolls to threadjack? I'd really like to stay on topic with Indy Mac...

Oh well. My two cents: I find it odd that we are required to shoot a uniformed enemy soldier on sight, and can get a medal for it, but when its an enemy who doesn't wear a uniform, such an act is sometimes murder and sometimes not.

Back to IndyMac, one only had to look at their aggressive (some would say reckless) loan portfolio to know they were a risky place to stick cash. Any bank out there with really aggressive marketing of easy credit (CapitalOne, I'm looking at YOU) are the same banks that we should be careful of depositing or investing in.

mfbenson et al., - there's a lot of talk about there about the meltdown and how the housing market will never pick up because people can't get mortgages - but what if you can get a mortgage? I really don't want to get a mortgage and then go through the PIA of the bank getting seized, and (hopefully) sold to someone else - I don't know that they'll all go as smooth as IndyMac's - I can see where even just having a mortgage issue in the middle of a mess like that would be insane.

I had 2 construction loans with Indymac and found them to be thorough, professional and responsible in their actions. They enabled many people able to build homes allowing you to do the work yourself as an owner builder and thus let you save major amounts of money, especially if you were in the trades or were not afraid to pitch in and do some work yourself. They allowed a person to be their own GC which was unusual, but you had lots of documentation in the loan packages and they used caution in their review and comparisons of costs and expenses, then while in the building process were good about inspections and release of funds. I never thought their approach was irresponsible or risky, they checked your figures and made sure everything was in line. Labor is a huge amount of a homes building cost. I was working on a 3rd loan just recently and was hoping to close the week everything went south. I thought they had changed when a good loan officer we knew left months ago and went to BofA, also I got a call at work (Im in HR) reverifying my own employ, I could barely understand the 2 outsourced Indian people who were calling me, 2 on different phone calls at the same time, the heavy accents and they were completely unorganized. No offense meant I dont want to start trashing any ethnic group, its just the outsourcing is a disappointment, just that the job is outsourced, and its annoying when you cant fully understand them.
I didnt pick it up in the previous posts, so sorry if this was already brought up, and I could also be in error, but I thought that 100,000 was the limit of one depositor, so if a couple had money in a bank that expanded the coverage to 200,000, it is a guarantee per depositor. There also may be a distinction for retirees monies, not sure on what type of account it has to be - another type of depositor -is guaranteed by FDIC for 250,000.

So pollyanna - does that mean your not going to be able to close? Or just that things don't seem quite as smooth as they did before?

"I really don't want to get a mortgage and then go through the PIA of the bank getting seized, and (hopefully) sold to someone else..."

The VAST majority of mortgages are sold into the secondary market.
That is how Freddie and Fannie get them.
The bank then has money to loan to another customer.

The only trouble would be if you were trying to close and the bank when under.

marys1000, we were not getting the rate we wanted at the end of all the documentation and qualifying, our loan broker was not understanding what the delays and the rate issues were, this was a well known local broker and personal friend of our real estate agent, not an indymac loan officer. He was having delays and indecision, plus the rate wasnt what we wanted. We couldnt figure out what was going on because we thought that bank loved us, making a good easy hunk of money on us on two prior loans. But this one was with a different division, not the construction division, then Im not sure, our broker just said we cant close with this loan, so we started up with a different bank. It was like an Abbot Costello routine dealing with the re-verifying dept there, total chaos. They left my HR line a message, 2 mintues later I was returning the call, then while on the phone with the lady who left the message, another person from her department was calling me on a different line, they were all over their phones in a sort of rush. Very unorganized and chaotic over there. I dont know why but I got bad vibes right then that they were in some kind of rush. Anyway we werent getting the rate we wanted and should have been getting, so maybe thats why our broker went to another source right away, and then the news of what was going on at Indymac hit. Long ago for construction loans we tried WaMu, but their documentation was ridiculous if you wanted to GC yourself, you had to get 3 bids written on every aspect of the process, way too much hassle and paperwork, Indymac had a review process which took in local costs by cities and checked to see if you were in line or not, then questioned line by line if necessary. All in all they were reasonably responsible, so it would seem to me that the construction loan division should not be under scrutiny now, but with the current cautionary trends and changes leads me to believe it will almost be impossible now for someone to be an owner builder and get a construction loan with out actually hiring a GC and paying that extra money.What they did use was Buildmax, dont even know if they are around anymore, but they guided and helped you get your bids and helped to present the package, the first construction loan we used them at a cost of 3 to 4 thousand not sure, but then on the second loan my husband had already become a GC, so we didnt even use anyone like Buildmax and they had no trouble with our loan docs and bids etc. I think it was mostly getting in over their heads with debt like everyone else, then a run on the bank didnt help.

"mfbenson et al., - there's a lot of talk about there about the meltdown and how the housing market will never pick up because people can't get mortgages"

Never is an awfully long time. There's no reason to think that appreciation at the rate of inflation won't resume, once values return to long-term norms.

"but what if you can get a mortgage? I really don't want to get a mortgage and then go through the PIA of the bank getting seized, and (hopefully) sold to someone else"

Ok, but this has always been an issue and is not much new. It is arguably more difficult these days for the average person to guage the risk of a bank they are going to do business with, but I would argue that the internet and search engines actually make it easier to determine their bank's health.

"I don't know that they'll all go as smooth as IndyMac's"

You call IndyMac's smooth? What do you picture as a bad one? IndyMac's seizure was the third largest bank failure in american history...

"I can see where even just having a mortgage issue in the middle of a mess like that would be insane."

That's what guarantors and reinsurance are for.

Don't you love how the right-wingers started girding up for battle, lambasting Chuck Schumer for writing a letter to the comptroller of the currency (or whoever it was) saying that Indymac seemed to be a little unstable? It's of course ALL HIS FAULT that the bank went under. Had nothing to do w/ bad loans, or undercapitalization, or anything else. Impeach!!! ::eye roll::

Anyone else notice this little nugget in that terrorist-detention article?

The government contended, in a declaration from the defense intelligence official, Jeffrey N. Rapp, that Mr. Marri was a Qaeda sleeper agent sent to the United States to commit mass murder and disrupt the banking system.

Well, apparently he did his job quite well, even from prison (he's been locked up since '03).

Because of the complete incompetence and institutional racism in the government, NO ONE should be allowed to be kept locked up for years and years without a trial. I don't care who they are or what they're supposed to have done or been planning to do. One of the most basic principles of America is the right to a fair trial. If we do away with that, for anyone, then the terrorists have won.

For now, I have nothing to fear--WASP thru and thru--but that doesn't mean that someday we WASPs won't be the oppressed minority. That's the whole point of the Constitution--to protect the minority/powerless from the majority/powerful.

They came first for the Communists,
and I didn't speak up because I wasn't a Communist.
Then they came for the Jews,
and I didn't speak up because I wasn't a Jew.
Then they came for the trade unionists,
and I didn't speak up because I wasn't a trade unionist.
Then they came for the Catholics,
and I didn't speak up because I was a Protestant.
Then they came for me,
and by that time no one was left to speak up. --Martin Niemöller

"Don't you love how the right-wingers started girding up for battle, lambasting Chuck Schumer for writing a letter to the comptroller of the currency (or whoever it was) saying that Indymac seemed to be a little unstable? It's of course ALL HIS FAULT that the bank went under. Had nothing to do w/ bad loans, or undercapitalization, or anything else."

Schumer was fine to write the letter.
He was NOT fine to release it publicly.

'Fractional banking' as used in the US means that NO bank has 100% of the cash to redeem all the deposits they hold.
The money has been lent out to earn interest.
The bank gets a cut and so does the depositor in the bank.

Shumer triggered a run on Indymac.
The depositors rushed to withdraw their money.
Since the bank has only a fraction of the deposits available as cash, the bank collapsed.
While it may have been on a 'watch list' until Schumer created the run it was NOT in immediate danger.

"Then they came for me,
and by that time no one was left to speak up"

Since when has speaking up ever made a difference?

"And finally, and perhaps most importantly, the second circuit ruled on this case as well and specifically held that the President did not have unilateral authority to suspend habeas corpus for American citizens. Therefore, your entire premise that the Fourth Circuit was the highest court to rule on this matter, was on its face false."

You are still confused, BMM. That's not so surprising because the procedural history of the Padilla case is both long and very complex.

The huge problem with citing the Second Circuit's decision is that it's moot. When the Government appealed the decision to the Supreme Court, the Court heard the case, but dismissed the defendant Padilla's petition on the technical ground that it had been improperly brought before the Second Circuit, which lacked jurisdiction to hear it. Padillo at that time was residing in a military brig in South Carolina, which is within the territory of the Fourth Circuit.

This Supreme Court dismissal mooted the Second Circuit decision, and, hence, it has no precedential value.

OTOH, after the case was transferred to the Fourth Circuit, it held against Padilla. When Padilla appealed the Fourth Circuit decision holding that the Government had the power to designate him and detain him as an "enemy combatant" without charges and with disregard to habeas corpus, the Supreme Court, with three justices dissenting, refused to take it up.

That means the Court had the opportunity to reverse the Fourth Circuit, but gave it a pass. So your claim that "However, there isn't a person in the judiciary that doesn't realize that the administration's position would have been overruled by the Supreme Court" flies right in the face of the actual facts.

As it stands right now, the Fourth Circuit has had the last word on this issue.